The bulls got back in the win column on Wednesday after 5 days of heavy selling pressure which pushed the major index lower by 4%. The talking heads were pointing towards Alcoa (AA, $9.90, up $0.58) as being a “catalyst” for the rebound after the company beat Wall Street’s estimates. Really?
This is exactly why we call them “talking heads” because Alcoa accounts for less than 1% of the weighted Dow 30 stocks. In other words, Alcoa was responsible for maybe a point of the Dow’s nearly triple-digit gain yesterday.
We can point to Spain’s bonds falling below 6% which was one of the reasons for the selloff as one of the catalysts for yesterday’s bounce, or better-than-expected economic news. However, we are chartists and after a 4% decline and two waves of support tested, it was time for a small rebound.
If you are not a subscriber but would like to read more please click here. We closed 6 more winning trades yesterday which gets our 2012 Track Record to 67-13 (84% win percentage) that includes 13 triple-digit winners with gains of up to 400+%! One more time…80 trades, 67 big money option winners.